Analysts advised buying shares of US auto giants Ford and GM on the downturn

Shares of U.S. automakers Ford and GM have become attractive after their recent declines, analysts believe. UBS Investment Bank advised to buy Ford securities on the decline, because it believes that investors' fears about the shortage of aluminum for production are exaggerated. And Deutsche Bank recommends buying GM shares after their fall by 2% due to fears of higher logistics costs in connection with the conflict in the Persian Gulf.

Concerns over aluminum and gasoline prices put too much pressure on Ford Motor shares, which made them an attractive idea to buy on the drawdown, UBS believes. The investment bank upgraded the company's securities from Neutral to Buy, CNBC writes. UBS kept the target price at $15 per share, which is more than 18% above the closing level of trading on Tuesday, April 14.

"Investors have been very focused on the impact of aluminum prices on Ford. However, we believe these concerns are exaggerated," UBS analyst Joseph Spak wrote in a note to clients (quoted by CNBC).

Ford uses aluminum in the bodies of some of its pickup trucks, including the Ford F-150. The company's dependence on the material has raised concerns among some investors after spot aluminum prices on the London Metal Exchange have risen about 16% since the start of the war with Iran, UBS explains. The automaker's shares have fallen 13.7% over the same period.

An additional factor was the fires at supplier Ford's Novelis aluminum smelter in New York State in 2025, which led to a spike in aluminum prices and supply constraints. Ford reported that the fire cost it $2 billion in losses in the second half of 2025.

"We believe Ford has 'hedged' its aluminum exposure for this year. In addition, steel prices for 2026 are already contractually locked in. Therefore, we see little risk to Ford's outlook, which assumed a $1 billion negative year-to-date impact from commodities, primarily steel, aluminum and memory chip prices," Spak wrote.

The analyst added that Ford could show strong earnings in the coming years. "Beyond 2027, we believe Ford will begin to move toward EPS potential of $3. This will be driven by the product portfolio, a softer regulatory backdrop in the U.S. combined with a more pragmatic strategy in the electric vehicle segment, emerging opportunities in energy storage systems and a stronger focus on high-margin software for the Pro division," Spak wrote.

Deutsche Bank analyst Edison Yu similarly upgraded General Motors shares from Hold (advice to hold) to Buy, and raised his target price from $83 to $90, up 13% from Tuesday's closing price, CNBC writes.

The stock has fallen more than 2% since the start of the war with Iran amid concerns about rising transportation costs and possible supply disruptions. Yu considers this an "attractive entry point" and the concerns exaggerated.

"There is certainly short-term volatility related to geopolitical events, but our investment message builds on GM's operational resilience, which the company has demonstrated repeatedly in recent years," Yu wrote in a note cited by CNBC. - While the outlook for 2026 has naturally become less robust than it was a few months ago, we still believe many of GM's profit drivers are within the company's own control."

The analyst added that General Motors' lineup refresh, including the launch of next-generation pickup trucks in 2027, could support further share gains. In addition, the automaker's accounting adjustments should show smaller losses in the electric vehicle segment. Deutsche Bank estimates that GM's software and services business will also continue to strengthen the company's position.

Ford shares rose 4.5% to $12.7 on Tuesday, but they remain down 3.1% versus the start of 2026. According to MarketWatch, of the 25 analysts tracking the automaker's securities, 17 advise holding them in the portfolio (Hold), six recommend buying (Buy and Overweight), and two recommend selling (Underweight and Sell). The Wall Street consensus target price is $13.7, up 8% from the closing price on April 14.

Shares of General Motors also rose by 3.4% to $79.5 on Tuesday. Relative to the beginning of the year, they remain down 2.3%. According to MarketWatch, Wall Street is more optimistic about GM shares than Ford: of the 29 analysts tracking GM shares, 20 advise to buy, seven advise to hold and only two advise to sell. The consensus target price is $94.9, up 20% from Tuesday's closing price.

This article was AI-translated and verified by a human editor